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| Tax code, global cues take Sensex up 498 pts |
| BS Reporter / Mumbai Aug 14, 2009, 00:35 IST |
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Fed remark, S&P’s new GDP forecast also help.
The Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, gave a thumbs-up to the new proposed direct tax code, which would lower tax rates for individuals and companies. The benchmark index gained 498.33 points, or 3.32 per cent, to 15,518.49, its best performance in more than 11 weeks. On May 27, it had gained 520 points.
The move to abolish the securities transaction tax (STT) was welcomed by daily market players as it would reduce transaction costs. Rating agency Standard & Poor’s added to the positive sentiment by raising its forecast of India’s economic growth by 30 basis points to 6.3 per cent for the current fiscal owing to stimulus measures and improvement in global conditions. Global cues were also positive.
US markets rallied on Wednesday on the back of an improved outlook from the Federal Reserve and an encouraging housing report. The Federal Reserve kept its benchmark short-term interest rates unchanged and said the economy was gradually recovering. The Dow Jones Industrial Average added 1.3 per cent while the Nasdaq Composite Index gained 1.5 per cent.
Taking cues from international markets, Asian markets also ended on a positive note. The Hang Seng surged 2.08 per cent, The Straits Times added 1.67 per cent and the Taiwan Weighted Index soared 1.97 per cent. The Jakarta Composite Index was up 2.09 per cent.
On BSE, realty, metal and automobile stocks led the upmove. However, the Sensex stayed range-bound in the afternoon session before breaking out in the final hour of trading and settling at 15,518.49. The CNX Nifty closed at 4,605, up 147.50 points.
DD Sharma, V-P, research (retail), Anand Rathi Financial Services said. “There has been consistent buying from long-term investors and short-covering On Thursday.”
Market players said the abolition of STT would be beneficial for both brokers and day-traders by leading to a significant rise in volumes and more arbitrage opportunities.
The market breadth was extremely positive. Out of 2,813 shares traded, 2,222 advanced, 537 declined and 54 were unchanged on the BSE On Thursday.
Among big gainers among the Sensex stocks were DLF, which surged 7.21 per cent, followed by ICICI Bank (6.53 per cent), Maruti Suzuki (6.41 per cent), Tata Steel (6.04 per cent). Tata Motors, Sterlite, SBI, Larsen & Toubro and ITC were all up over 5 per cent.
Hindalco, Hero Honda, Jaiprakash Associates, Reliance Infrastructure, Housing Development Finance Company and Reliance Communication soared 3-5 per cent.
All sectoral indices ended on a buoyant note. The BSE Realty index zoomed 6.86 per cent. It was followed by metal (5.57 per cent), auto (4.41 per cent), Bankex (4.34 per cent), capital goods (4.20 per cent), FMCG (3.94 per cent) and public sector (2.98 per cent). Power, consumer durables, oil & gas, information technology and healthcare rose in the range of 1.65- 2.76 per cent.
Foreign institutional investors were net buyers of Rs 630.94 crore and domestic institutional investors were net buyers of Rs 182.85 crore, according to provisional data by BSE.
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